Falconer otherwise rebuffed a campaign for delay by councils and some Labour MPs.The rent affordability cap has been introduced for properties whose target rents were headed for "big increases", Falconer said. "We recognise that in high value areas, [rent restructuring] has an impact on certain tenants."
The maximum rent payable by tenants in 2002/03 will depend on property size. A four-bedroom house will have a cap of £100, a three-bedroom house a £95 cap, a two-bedroom house a cap of £90, and one-bedroom properties and bedsits £85.
Where rents are higher than this they should be frozen or reduced, Falconer said, and DTLR officials added 15,000 London tenants would benefit from the caps.
The RPI plus 0.5 per cent plus £2 cap on rent increases remains, but the cap on maximum rents can increase by RPI plus 1 per cent.
Councils that cannot introduce rent restructuring in April 2002 have been "advised" to move rents as far as possible to the levels required by restructuring policy. And in these areas, average values for all properties can be used for one year, instead of the individual property level anticipated in the policy.
"We will be consulting very closely in relation to how we will introduce targeting of rent increases on individual properties," Falconer added.
The concessions are for councils unable to make the necessary changes to their computer systems and to consult tenants in time. Sources told Housing Today that DTLR secretary Stephen Byers favoured deferring the reforms for a year, but Falconer was unwilling to do so.
On the morning of this week's announcement, London Labour MPs were still claiming Byers had told them the policy would be delayed.
Housing associations which argued that they did not wish to raise rents but would rather pay for increases out of reserves will be allowed to do so. Asked if this meant some council tenants faced higher rises than housing association tenants, Falconer said: "We hope that over time anomalies will be removed. But rents will always be below market rents."
The government has also announced that its proposed changes for the Housing Revenue Account, launched in a consultation document in July, will go ahead with one change.
The various rents assumed by the HRA system – guideline, actual and limit rents – will be brought in line with the formula target rents produced by rent restructuring. But proposals to scrap mitigation rules, which assist councils with an above-average number of tenants on rent rebates, have been scrapped.
Cash totals for the Major Repairs Allowance and management and maintenance grants were confirmed.
MRA will be £568.24 per dwelling on average for 2002/03 – a total equivalent of £1bn. The DTLR proposed that future yearly up-rates be in line with inflation.
Management and maintenance provision will increase by £93m, following last year's increase of £67m. It includes a correction for the reduction in the number of council properties last year.
Source
Housing Today
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